Sunday, 6 October 2013

A recent US research note from Goldman Sachs drew attention to a high-yield trap. That is, getting stuck in high-yield stocks that were bought for defensive attributes as substitute for bonds. According to the piece by Christian Mueller-Glissman, the attractiveness of high yields is in danger and clients should look to re-leverage stocks. With interest rates more likely to rise than go down, investors are looking for reasons, other than dividends, to invest. The article goes on to cite the Anglo-Dutch company, Unilever, as one of its top European picks.